Cleantech Venture Capital and Entrepreneurship

Solve for X Talk

noreply@blogger.com (Aaron Fyke) — Tue, 14 May 2013 20:36:00 +0000

The conference was pretty interesting. Here's a link to the talk.

Start at 1:10:10.

Solve for X in Washington DC

noreply@blogger.com (Aaron Fyke) — Sun, 12 May 2013 05:33:00 +0000

I've been invited by Google and USAID to speak at the Global Diaspora Forum in Washington next week. If you are going and would like to check it out, I'll see you there!

Register for the next Solve for X, at the Global Diaspora Forum in DC, May 13: goo.gl/ROSmr See you there!
— A Googler (@google) May 9, 2013

Aaron Fyke MIT talk part of Google X - Solve For X Series

noreply@blogger.com (Aaron Fyke) — Mon, 04 Feb 2013 17:17:00 +0000

I am privileged to be in some pretty impressive company. My recent talk at MIT was picked up by Google and is hosted as part of their "Solve for X" series of moonshot thinkers. Link is below.

http://goo.gl/vZzKx

Immigration Reform - "Back of the Line"

noreply@blogger.com (Aaron Fyke) — Thu, 31 Jan 2013 19:11:00 +0000

Obama said something interesting with his speech about comprehensive immigration reform the other day. He said that illegal immigrants would need to go to the "back of the line".

For unskilled immigrants, there typically *IS* no line. There is basically no way to legally come to the US, unless they are family members of existing US citizens. See the chart below.

So, I wonder what he was talking about? I think immigration reform is a necessary step, but I'm really interested in how this is actually going to be implemented.

Politics and Entrepreneurship

noreply@blogger.com (Aaron Fyke) — Tue, 22 Jan 2013 20:46:00 +0000

"Obamacare" has been cast as a left vs right issue. Democrats are in favor of it. Republicans hate it. However, the reason for this is that it is framed as a "lazy do nothing people being given healthcare paid for by good, hard-working citizens who already have healthcare". This is silly, yes. However, as far as entrepreneurship goes, there should be far more right-wing support for Obamacare than there is.

Why is this? Because, here in the US, healthcare and employment are very tightly linked. This is fine for those with a job. However, it is not so fine if you want to quit your job and start a company. I thought Obama's remarks yesterday summarized it perfectly:

"They do not make us a nation of takers; they free us to take the risks that make this country great."

Government programs which allow people to walk away from their job and start something new are critical for new company development. Entrepreneurship and free enterprise should be cornerstones of the Republican platform, and they should favor any policy which promotes new company development. It seems that this point is being lost in the noise.

The CEO's job

noreply@blogger.com (Aaron Fyke) — Sat, 22 Sep 2012 22:58:00 +0000

I don't often have the opportunity to post on my blog. Usually what I'm doing with Energy Cache is not something that I can talk about. However, recently I had a great experience that I thought was worth writing about.

The job of the CEO is to best manage the company on behalf of the board, who in turn, represent the shareholders. Therefore, it can be an easy assumption that the CEO reports to the board and attempts to meet their needs. While simplistic, and often generally correct, it is a false simplification. There can exist the possibility that different board members have conflicting needs/desires. Under the "serve the board members" model, this puts the CEO in a difficult role if he or she is trying to make everyone happy. However, truly serving the board means doing what's best for the company, regardless of whether you make people happy. People are looking at you for the decision on what is right - not what everybody else thinks is right (and certainly, not what's right for them).

Not making these decisions, even to attempt to address the wishes of those you report to, is a breach of duty. This is a key distinction why the CEO's job differs greatly from many other jobs out there. In pretty much every other job, your job is to support your customer, who is almost always the person you report to. With the CEO, it may seem that the customer is the board, but it isn't. It's the company. I'll say that another way. A CEO may serve at the pleasure of the board, but the CEO doesn't serve the board - he serves the company.

As CEO you aren't paid to be popular. You are sometimes paid to be unpopular - even if the people that you are unpopular with are the ones paying your salary.

I saw that recently, it is something I'm going to regularly have to force myself to remember, and thought it was worth talking about.

The math of turning 40, Time Dilation and Back to the Future

noreply@blogger.com (Aaron Fyke) — Sun, 01 Jul 2012 20:22:00 +0000

First - Happy Canada Day!

Second, I'll be turning 40 pretty soon and it got me thinking about the phrase "middle age". It's always been my observation that life is "speeding up". When I was a kid, the time between Christmas from one year to another seemed to take an eternity. Yet now, I struggle to remember that 1993 wasn't 9 years ago, but 19! What's going on?

My theory is that we are terrible at tracking time. Instead we can track "relative time". When we are six years old, the time from one Christmas to the next is fully one sixth of our lifetime - in fact, given that, at age six, we may not have any memories earlier than age three, we could conclude that each year is fully a third of our existence. However, once we reach age 40, each year is only a sliver of our total existence, and thus seems much smaller. This seems to be the only reasonable explanation of where my 30s went in a blink of an eye.

So, I decided to model this behavior and see what I discovered. I made the initial assumption that our memories start at age 5 and end, with death, at age 80. I then figured out the relative length of each year, to determine how long each year feels to us. The results are interesting:

Let's first look at the cumulative chart. This example takes the relative age for each year. By measuring the areas under the curve we can determine the age of equal "relative age", or the ranges of ages which should "feel" the same period of time, taking into account the apparent acceleration of the years.

This shows that the first quarter of our life is over by age 10, the second by age 20, the third by age 40, and the last quarter, by age 80 (which, if you think of the math, makes perfect sense). If I think of my childhood, this also feels right as well. My teenage years, which technically lasted as long as my 30s, were a lifetime! My 30s, I believed, happened when I went out for lunch one day.

So, the horror that we can realize is that 40 is not middle age - 20 is! By the time you reach 40, you've lived fully 75% of your apparent life timeline. Even though you are halfway through your life, the remaining years will seem like the blink of an eye.

Another way to look at this is with this graph:

This lets us determine what age corresponds to the percentage of apparent life lived. For example, as shown, the age at which you have lived 60% of your perceived life is actually 25. On one hand, this is a clear call to enjoy your youth, on the other hand it shows that we've all been given the gift that our youth lasts a disproportionately long period of time - which is great if you had a good youth, not so great if you didn't.

Now, interestingly enough, these results are driven by the assumption that you have perfect memory of your life, and thus each minute seems progressively quicker than the minute before. This leads to some interesting conclusions. The first is that there is a real cost to memories - their cumulative effect serves to make your life appear to go quicker. So, if at all possible, there's little point fixating and hanging on to bad memories. Relieving them serves to slow down the perceived acceleration of time. As well, there is possibly the saving grace that, as you age, your memory of earlier events starts to diminish. This will put more relative weight in the later years and appear to slow time down. Looking at the first graph, if you were able to forget the first 10 years of your life completely, then the effect is dramatic on shifting the relative weights of the later years. Is it possible that there is some benefit to dementia and memory loss in your later years? I doubt the benefits outweigh the dramatic costs, but it's an interesting thought.

This also leads to some conclusions about kids. As I watch my kids grow up, I get to experience, vicariously, their experiences. While overall life is zipping by for me, and they are growing up at an incredible rate (from my point of view), they also help to slow my life down by providing an external reference point to my life. Time dilation may be part of Einstein's theory of relativity, but its also alive and well between two people at dramatically different points of their life.

So, as I round out the first 75% of my life, and I see that we are almost in 2015, the year at which Back to the Future will be as far from me as 1955 was for my Dad when the movie first came out in 1985 (and led him to say that he felt old!), I can really question the phrase that "life begins at 40". If it does, then life sure felt like it took a long time getting started. Enjoy every moment that you live, and savor every good memory you have. Even if you live to 80, you're just not here very long.

MIT news article

noreply@blogger.com (Aaron Fyke) — Thu, 12 Apr 2012 18:24:00 +0000

It's always nice to get some press from MIT. Here's a recent story they did on Energy Cache.

VCs moving on?

noreply@blogger.com (Aaron Fyke) — Tue, 10 Apr 2012 23:26:00 +0000

A lot of venture money was raised in the late 90's, before the burst of the first internet bubble (2001). There has been a lot of talk [citation needed, but I can't find right now] that, since most VC funds are 10 years in duration, we would see a great VC contraction sometime around 2010. In fact, I had a list of firms that hadn't made any investments in years, and I haven't gone back to check if they are still around.

However, anecdotally, I have witnessed a contraction of another sort. Good firms, that are still around, losing good partners. As I've been speaking to investors lately, I've discovered no less than ~~six~~nine different partners that I knew personally, mostly senior, from very good firms, have moved on. They have all taken senior operating roles with technology companies (no surprise, as that is the typical path in and out of VC), but what's interesting is that this seems to be more than the typical gas diffusion mechanic between VCs and tech companies.

What does this mean for the investing landscape, and how those firms operate? I'm not sure, but I'll certainly be watching.

Energy Cache Media Presence

noreply@blogger.com (Aaron Fyke) — Mon, 26 Mar 2012 04:42:00 +0000

Energy Cache was written about recently in a posting on Earth2Tech. The source of that post was the recent Wall Street Journal’s Eco:nomics conference where Bill Gates commented on a company that he was involved with that was doing “gravel on ski lifts.” Also, included was a link to our patent and our operational video. I'd like to comment on a few of the things mentioned, and not-mentioned, in the article.

Reduced Technology Risk for Ease of Market Adoption
Energy Cache's design philosophy, from the company's founding, was that energy markets want minimal technology risk. This has been my experience starting with my early engineering career developing fuel cell technology, to my more recent experience as an investor in solar companies. In both those cases, the technological unknowns were the least appreciated by the established, conservative, market. While Energy Cache has made impressive technological developments, we developed the technology so that we could, as much as possible, co-opt the existing expertise, supplier base, and operational knowledge from existing industries and use them to solve the problems that we wanted to address with energy storage. This is how our small team has been able to design and construct our 50kW installation on impressively efficient schedule and budget.

Ease of Siting
The difficulty, for current technologies, as stated in the article, is siting and permitting times. Pumped hydro needs two large reservoirs; compressed air energy storage (CAES) requires an underground cavern that doesn't leak (the efforts of "above-ground" CAES solutions excepted). At the recent ARPA-E Summit, Secretary Chu stated that "geologic solutions" would be necessary going forwards, regardless of the current siting and permitting difficulties. This is a view echoed by Pike Research. However, one of the pieces of brilliance in Energy Cache's approach comes from the fact that we will likely not experience the same siting and permitting difficulties of pumped-hydro and CAES. This comes, in part, from the flexibility achieved by using a low-cost base unit. A typical pumped hydro facility consists of a single, or very few pumps/generators (PG&E's Helms Pumped Storage facility consists of three 400MW turbines, for a total of 1.2GW). This is the only way to make either the technology, or the economics, work - build at very large scale. In doing so, such installations become very difficult to find appropriate sites for. Energy Cache's system deploys many units and can be far more flexible in terms of economic operating size. Therefore, we have already found a tremendous number of sites suitable for our more flexible technology that would be inappropriate for CAES or pumped hydro. In addition, we have several other benefits, which I won't discuss here, that we expect to greatly reduce the permitting difficulties that have previously been mentioned.

Outstanding Economics
The article says that "Terrestrial storage isn’t cheap." This is true in absolute terms, due to the size of these projects (as mentioned above). However, on a kW or kWh basis, pumped hydro storage and CAES are among the cheapest technologies currently known, as listed in EPRI's Energy Storage Report, page 4-22. Pumped-hydro storage is the de facto storage solution that every utility would like to deploy. We believe, and this is backed up by the data, that Energy Cache will have a compellingly competitive cost structure as compared to these technologies. In addition, Energy Cache has solid data that demonstrates that we will be one of the highest revenue earning storage technologies possible. This puts us in a class of our own in terms of potential profitability.

With a substantial number of operating sites identified, extraordinary economics, a rapid path to market, and the backing of some extraordinary investors and technology visionaries, I'm very proud of what Energy Cache has accomplished in such a short time, and where we'll be headed in the future.

Social Landing Page

noreply@blogger.com (Aaron Fyke) — Thu, 24 Nov 2011 17:36:00 +0000

I regularly get friend requests for LinkedIn and Facebook (I'm still dabbling with Google+). One thing that neither of these sites have is a "landing page". I'd like to have a web presence that lets me know my rules of accepting their connection. Of course, none of these sites offer this because the strong social pressure to accept all links is part of the reason that they have grown as successfully as they have. The fact that there is no good way of rejecting someone, other than ignoring them, is great for Facebook, but bad for me.

So - this posting is meant to resolve this. I am being very selective on my social networking, and I have been since starting on LinkedIn. In order to connect with you I'd like to know you well enough to ask a favor of you. At a minimum this means that we have to have met. Most likely it means that we have had a conversation long enough so that in six months I can contact you and remember exactly the context in which we met.

Since I use LinkedIn mostly as a means of being introduced to people, if I don't have a strong connection to my primary links, I find I have no social capital to ask for introductions to their links, and so the primary link is pointless. Therefore, this isn't a beauty contest of who is "worthy" to be connected to me; it's just that, if I don't accept your invitation, I don't feel worthy of asking you for favors in the future.

Thanks for your understanding.

The Gates Notes

noreply@blogger.com (Aaron Fyke) — Thu, 17 Nov 2011 16:25:00 +0000

Bill Gates had a really good writeup on the need for energy storage and what we're doing at Energy Cache. Check it out.

Why Hubbert’s Peak May Not Happen, and Why That Misses the Point

noreply@blogger.com (Aaron Fyke) — Sun, 18 Sep 2011 06:28:00 +0000

I was asked by one of the executives at Idealab to comment on today's Wall Street Journal essay by Daniel Yergin, entitled "There Will Be Oil". I'm currently reading his book, The Prize now; unfortunately, I thought very little of his essay. Here's what I wrote:

What a disgraceful, sensationalist, condescending, collection of half-truths! The first half was inexcusable, and the second half was simply bad. The author is partially correct in some areas, but for all the wrong reasons, and his final conclusion is simultaneously wrong, and irrelevant.

Why Hubbert’s Peak May Not Happen, and Why That Misses the Point

Let’s keep something in the forefront of our minds – we care about the future price of oil. Hubbert’s analysis matters because it predicts rapidly escalating oil prices. Any conclusion which claims that massively increasing oil prices will prevent Hubbert’s peak, misses the point entirely, and is so bafflingly daft as to border upon willful intellectual fraud. We’ll be saved from skyrocketing oil prices as soon as the skyrocketing oil prices arrive and are here permanently. Hooray!

It's true that Hubbert's analysis ignored economics. He took his analysis simply from the geophysics of extraction. However, the economic analysis results in some curious results - literally the physical manifestation of the philosophical argument of "what happens when an immovable object meets an unstoppable force?". In this case, the immovable object is the oil supply and an unstoppable force is the demand for oil.

In both cases, neither force is truly unstoppable. Better technology, especially spurred by higher prices, will shift the oil supply curve. As oil gets more expensive, other means of supply become feasible. We can drill deeper and deeper (and expose ourselves to more Deepwater Horizon type accidents). We can turn a frozen mixture of tar and sand into oil by injecting steam and scrubbing like crazy (not too far removed from recovering oil from a Walmart parking lot in Wisconsin in January – see, two can play the sensationalist game). In the mid-90's I've worked in the oil fields in Canada doing what's called "tertiary recovery". Primary recovery is when the oil flows out of the ground. Secondary recovery is when water is injected into an oil field to push up the remaining oil. Tertiary recovery is when solvent (ie, soap) is injected into the field in hopes of scrubbing the last few drops of oil from the rock walls. Tertiary recovery is done when the value of oil recovered exceeds the cost of scrubbing. But let's not kid ourselves on what the value of oil needs to be for these processes to be economic.

On the other side is demand. People have been arguing strongly for conservation since Carter. Here too, we see oil prices at work. As oil prices rise there is a greater and greater incentive to implement conservation and efficiency efforts. These are now becoming fashionable and practical, but during the Reagan administration (and many times since), it was considered downright "un-American" to even consider conservation. However, the article makes the hilarious claim that increased efficiency, which has barely made a dent in the inexorable growth of oil consumption, will actual cause demand to "slacken" by 2020 - in light of booming growth from BRIC (Brazil, Russia, India, China) countries as well as existing first-world countries.

However, before I address the many fallacies in the article, let's examine what we've discovered. Skyrocketing oil prices will increase supply. Huge leaps in the price of oil will spur efficiency savings, "reducing" demand. So, as soon as we see massive increases in the price of oil, and we'll be saved!

Now, back to the argument that we will all be saved from the calamities of skyrocketing oil prices due to Hubbert’s peak through the benevolent gift of skyrocketing oil prices. What actually happens to oil production, and Hubbert's global peak, depends on the relative elasticity of oil supply and demand, relative to oil prices. Which immovable object and which unstoppable force is truly unstoppable? Which of these global titans will win - is it the Earth's relentless difficulty in providing oil, our our insatiable thirst of consumption?

If the supply-side proves to be stronger - if the Earth absolutely will not provide more oil, regardless of price, then we shall see Hubbert's peak occur. We will see oil production decline regardless of demand. Each new day of decreased production will see further escalating prices. Now, if the demand-side proves to be stronger. If people absolutely will not reduce oil consumption regardless of price. If people will pay any price for oil, then we will not see Hubbert's peak. We will see continued oil production, straining to match the daily rise of oil consumption. This oil production will come from further and further fields, and processes, which only become economic through increased oil prices (as we are seeing with the tar-sands, and tertiary recovery, and some other things the author mentions). We could see a production "plateau" that the author mentions.

So, let’s quickly examine the elasticity of oil supply and the elasticity of oil demand in order to determine which is more likely to bend. As a fun example of oil demand elasticiy, let’s look at one indicator of how strong our demand for oil is. Shown below is the total vehicle-miles driven on all US roads (data from DOT). It shows steady growth, almost doubling in amount, from 1985. The only remote dip occurs due to the greatest economic collapse this country has seen since the Great Depression. The consequences of this collapse? It set us back about 2~3 years. Oh, and we’re back to climbing again. So, we can conclude that oil demand is very inelastic, and unlikely to change much.

So, now we turn to our analysis of the elasticity of oil supply, and at the same time, let’s addess one of the author’s more heinous misdirections. Hubbert's analysis was done with the assumption that oil prices would be reasonably stable. This is why he neglected improved technological means of discovery. Since oil prices have been reasonably stable since the 1950’s the analysis has proven robust. However, with extremely high oil prices will come the economic pressure that drives further expansion. The author claims that

“Overall U.S. oil production has increased more than 10% since 2008. Net oil imports reached a high point of 60% in 2005, but today, thanks to increased production and greater energy efficiency (plus the use of ethanol), imports are down to 47%.”

Ignoring the hint that ethanol could save the day (the economic and thermodynamic policy disaster that corn ethanol has been), let’s examine this glorious increase in US production in historical context:

Excellent. So after West Texas Intermediate hit a record high of more than $130/bbl in 2007, the US managed to increase its production to match that of 2003. If only oil prices would hit $2000/bbl, then we’ll be back to the go-go times of the 1960’s and we can all drive cars with fins and big-block V8 engines! It’s pretty safe to conclude that oil supply is very inelastic and huge changes in price are needed to move the needle on oil production.

So, let's look at what has happened - in both cases we see that any increase in oil production, or any decrease in oil consumption require astronomical increases in oil prices, and that's all anyone cares about. I suppose there is a sense of smugness in watching Hubbert's peak not arrive while witnessing $200/bbl oil. But nobody cares about the shape of the curve, we care about oil prices and that's what the author has failed to address.

---

Ok, I was planning on going through the article, paragraph by paragraph, and point out the half-truths, the misstatements, and the childish name-calling, but I’ve got pancakes to make. The only point of this article is, as I see it, to take regulatory pressure off of the oil industry, and to remove pressure (policy or otherwise) from developing alternative energy sources, because we can all realize that “everything will be just fine”. My advice? Buy oil futures. And invest in renewable energy.

What in the world is going on?

noreply@blogger.com (Aaron Fyke) — Thu, 18 Aug 2011 23:35:00 +0000

I gave a presentation to Idealab today. This was something I prepared when I was at the X PRIZE Foundation in 2009, for a group of manufacturing executives at an MIT conference. I updated the data for what's been happening these past two years.

I am really pleased with the opportunity I had to really dig into finding good data and case studies. I modeled it after Hot, Flat and Crowded by Friedman - a book I can highly recommend.

What in the world is going on web

View more presentations from afyke.

I should make one correction. When I first put this slide deck together, two years ago, the inputs that I provided to the model at www.climateinteractive.org resulted in a temperature increase of 2.6C by 2100. For some reason when I tried the model recently, I noticed some changes to their page, and the temperature increase was only 1.8C by 2100. This is a huge difference, and I'm going to contact them to see what changes they made to their model that resulted in this difference. What's interesting is that the CO2 concentration is similar in both cases, around 450ppm, so the change appears to be in the temperature calculation from the CO2 concentration.

House Renovation

noreply@blogger.com (Aaron Fyke) — Mon, 16 May 2011 20:03:00 +0000

I've been in the joys of house renovation for the past few months. It's been a great opportunity to start with a fresh sheet of paper and radically improve the efficiency of its subsystems (HVAC, insulation, lighting, etc). I've also taken to installing the network infrastructure for the house (which is interesting, given the obsolescence cycles of the computer/networking industry). I'm going to list good vendors that I've worked with, occasionally, in upcoming blog posts, but the first one is Optimized Cable Company (www.optimization-world.com). They were a handy source of cheap, quick networking components for the home.

Flipboard and Content Creation vs Consumption and the rebirth of Facebook

noreply@blogger.com (Aaron Fyke) — Mon, 07 Mar 2011 04:10:00 +0000

Thanks to my recent success at the Tech Coast Angels event, I find myself with a new iPad (version 1). I had been wanting an iPad for some time, but could never quite justify the purchase. Since I ended up with one, I've enjoyed using it. And, thanks to the iPad, I've discovered something remarkable.

I've been a Facebook user since mid-2007. I should write an entire blog post on my initial love affair with Facebook and then my slow decline. I remember my first purging of (non-)friends, my first set of rules for directing work-related invites over to LinkedIn, my first concerns over privacy, my concerns over Facebook's dismissive attitude of privacy, my long period of absence, where I still had my Facebook account, but never logged in, and then finally my eventual joining of the many others who either suspended, or canceled their accounts entirely. I haven't been a serious Facebook user since mid-2009.

So what caused me to come back? In a word - Flipboard.

Flipboard has solved a dilemma I have had with Twitter and Facebook for a while. That is, I like to use this blog to project information, but I like to use Facebook and Twitter to consume information. By placing this information in the format that Flipboard does, I find it far more engaging than the chronological scroll-information-dump format that either Facebook or Twitter defaults to.

Adding Reddit was a lot more involved (see link) but I really see this as a great tool. I can't remember where I read it, but laptops are great for content creation and iPads (and the like) are great for content consumption. Apps like Flipboard really show why this is so.

Energy Cache Triumphant at TCA Pitch Event

noreply@blogger.com (Aaron Fyke) — Thu, 03 Mar 2011 17:03:00 +0000

The company I've started, Energy Cache, came out with top honors at the recent Tech Coast Angels pitch competition. Considered the "Best Investment Opportunity" of 2011, the award was granted to Energy Cache from a very competitive field of around 170 entrants.

It's great to be receiving this recognition from the Tech Coast Angels as this pitch event is a premier event in Southern California's technology scene. What's particularly gratifying is that the competition, at this level, was extremely talented, and so to actually take away the top prize is a real privilege.

Energy Cache is an early stage technology company, backed by Pasadena incubator, Idealab. Our extremely low-cost energy storage solution improves grid reliability, better manages the transmission network, and enables wide-spread adoption of renewable energy at the lowest possible cost to consumers.

Energy Cache was founded to provide a solution to the grid's problem of increased volatility. Mass adoption of renewable energy, the fact that peak demand continues to grow faster than average demand, and the fact that it is getting harder and harder to build transmission lines, is really driving the need for energy storage at a very large scale. Without storage, these problems will be solved the way the grid has always solved problems - by building more capacity and putting in greater capacity margins. This will result in far greater electricity prices than without storage. There are a whole bunch of other advantages for storage, which I'm pretty excited about, but this boils down to building the grid that we need for the future.

Idealab's mission is to create and operate pioneering technology companies. Founded in 1996 by entrepreneur Bill Gross, Idealab has founded more than 75 companies including eSolar, Inc., Energy Innovations, Overture Services, Inc., CitySearch, Picasa and Internet Brands. Current operating companies are providing innovative technology solutions in industries such as software, search, robotics and alternative energy fields.

So, congratulations to the other finalists in the competition, and thank you to the Tech Coast Angels for putting on the event!

Slow recovery?

noreply@blogger.com (Aaron Fyke) — Thu, 07 Oct 2010 21:52:00 +0000

Wow. Back in March of last year I wrote about the dip in vehicle miles driven.

I went back to the source of the data, the DOT Traffic Volume Trends page, and got the new chart.

My point in my original post was that it seemed that nothing could stop the expansion of vehicle miles. It seemed that the Great Recession really did.

It also seems that we are, indeed, having a very slow recovery - certainly in the context of the past 25 years.

Steven Lopez - Real estate

noreply@blogger.com (Aaron Fyke) — Thu, 07 Oct 2010 18:10:00 +0000

The Freakonomics blog has a section entitled, "Stuff We Were Not Paid to Endorse". This is my version of this. Steven does not know that I am writing this, nor has he asked for any feedback like this of any kind.

I am writing this because I feel it is my duty, in the grand universe of karma, to express my views about our recent real estate agent, Steven Lopez. My wife and I recently purchased a home, after looking for almost a year and a half.

I am hereby announcing to anyone looking at purchasing property in the Los Angeles area, that Steven Lopez is, hands-down, the single greatest real estate agent I have ever come across. Period.

It is hard to even list all of the ways that Steven has helped us. The primary difference between Steven and other agents we know of is that Steven's primary goal was to ensure the best outcome for us, rather than the best outcome for him. This attitude pervaded everything he did, from the homes he suggested we pursue (and the ones he suggested we not pursue), to the valuations of the homes he provided, to the suggestions he made for home repairs, to advice on whether or not a given home was worth pursuing. His attitude always was that he was looking out for us, like a true agent should, and not looking to simply close a sale. This gave us tremendous trust in Steven and we were able to work with him as a partner in all of our transactions.

Steven is also extremely knowledgeable and intelligent. Real estate is the amalgamation of finance, law, negotiation, aesthetics, construction and life planning. Steven knew a substantial amount about all of these subjects and was able to give us clear guidance in many matters.
He provided incredibly detailed analysis for property values, and, as someone who's quite comfortable running multiple regression analyses, I was pleased to see his detail and rationale. He went the extra mile to ensure our offer was well received by the seller. Steven brought in the right professionals to help us assess the cost of repairs and upgrades.

As someone who as participated in a number of financial transactions with companies, I have always been dismayed that the real estate industry falls far short on the level of professionalism and skill for these transactions. Steven far exceeds the crowd and I urge anyone reading this, who has extremely exacting standards in their own profession and are looking to hire someone with similar qualities, to contact Steven.

We have had the experience of dealing with, on some level, about ten different real estate agents over the course of our life (some from this home purchase, some from others). I had long come to the conclusion that they all add incredibly little value, and the best agent one could hope for is one that was simply not evil or corrupt and wasn't going to backstab you. There are a number of reasons that I have a terribly low opinion of the real estate industry, but I believe the biggest flaw is the lack of a "repeated game". Real estate, by its very nature, involves people moving. So, good real estate agents are very rarely rewarded, if their best customers are now in another city. Likewise, terrible real estate agents are rarely exposed. This blog post attempts to correct some of that.

Energy Storage - the next "next big thing"

noreply@blogger.com (Aaron Fyke) — Wed, 12 May 2010 19:28:00 +0000

I had a great time at the ESA conference in Charlotte. The energy storage industry looks, to me, like renewable energy did in 2002. I think people are starting to understand that in order to meet the RPS targets that many states have demanded will require massive deployment of storage resources.

However, in other ways, it's not clear that this is like 2002 at all. It's more like solar in 2004 or fuel cells in 1996. There is so much interest in different technologies and everyone is trying something new. Just like solar has concentrating thermal-2-axis fresnel, dish (2-axis parabolic), 1-axis fresnel, 1-axis parabolic, monocrystalline silicon, polycrystalline silicon, front contact, back contact, triple junction, CIGS, thin film, concentrating PV, and many others, and just like fuel cells had companies developing PEM, phosphoric acid, solid oxide, direct methanol, molten carbonate and alkaline cells (and others if you start getting into metal air batteries), storage is seeing the same explosion of choice.

The established players are the battery companies. NJK, in Japan, has been selling Sodium Sulpher (NaS) for years to firm renewable capacity (due to policy decisions). Recently IPO'd A123 is moving from its transportation focus to sell utility scale battery solutions. Several other battery companies were also there.

The newcomers included flow batteries and flywheels. Beacon Power, of course had a strong presence, but it was neat to see other developments in flywheels by other early stage companies present.

With the ARRA funding now deployed and the ARPA-e storage grants getting underway, it will be very exciting to see what happens in the next 12 months. Given how things have been over the last 18 months, finding a sector that looks like 2004 is welcome indeed.

The Hook -Part II

noreply@blogger.com (Aaron Fyke) — Fri, 07 May 2010 19:25:00 +0000

I must say, flying is a great time for reading and blogging. I've never been able to get a lot of work done on a plane. I find that there really isn't enough room for me to spread out with my reports, and Excel sheets, and notepad and the like. However, I've discovered that typing on an iPhone is really quite reasonable given the space available (and this time I've gotten smart-I'm writing this on the Notepad and then I will paste it into Blogger later).

So, I'd like to finish off with the second of the two important items of any pitch - the hook. Last time I talked about being prepared for the questions that people will ask to quickly discount or discredit you. This is time-saving behavior on their part because if you are worthy of being discredited it is better to find out quickly.

The hook, however, takes this the next step. Once it is established that you are no longer an obvious negative, you now need to quickly establish a positive. As I mentioned last time, although the temptation is great to dump everything you have ever done in front of someone to prove how great you are, the show-biz adage has never been more true: "Always leave them wanting more.". The purpose of the hook is to drive your audience's interest in your pitch and to make *them* want to find out more about you, and ideally make *them* want to drive the process (sale, funding, whatever you are pitching) to a successful close. While GGGR may say that ABC is "Always Be Closing", you'll be miles ahead if the other party is the one pushing for a close.

To give an example of how this works, there was an early stage company called Velkess at the ESA conference. They had a really cool video that demonstrated their flexible flywheel. Part-way through the video, just as the flywheel was about to spinup, the video crashed. He couldn't get it started, and there was an actual groan from the audience, who wanted to see how it worked. So, he quickly described it, "well, what happens next is that I shake it and it remains perfectly stable". This just served to pique everyone's interest and he was mobbed for the rest of the evening as he sat at the reception showing the video again and again on his laptop to people. IronIcally, nothing creates demand like limited supply.

Although what happened wasn't the hook, per se, it is like that. It is important to communicate a simple, easily memorable set of facts that people can quickly use to justify their further interest in your business. Communicate the excitement around this simple idea, be able to defend against quick discrediting attacks, and you will find yourself pushed to further meetings and due diligence to close the deal.

Which is exactly what you want.

The Hook

noreply@blogger.com (Aaron Fyke) — Wed, 05 May 2010 10:23:00 +0000

It's 5:40am and I'm lying here in the hotel, waiting to get up in 50 minutes after staying up all night due to jet lag. I'm listening to Genesis' "shapes" album and writing my first blog post on my iPhone (does Blogger have an app? Using Safari for this is a bit tedious!)

At any rate, I wanted to talk a little about pitching for fundrising, although this applies to many sales meetings as well. When I was visited by many companies at my old firm I was amazed at how many entrepreneurs would try to cram as much as they possibly could into their pitch. It reminded me of my first resume writing attempts in undergrad where, in a desparate attempt to look like I had more experience than I did, I would cram every part-time and afterschool job or activity onto the page. I assumed that people would view my worth as the literal sum of the activities listed. To remove one would be to lower my overall worth.

I now understand the purpose of a targeted message and I understand the truism of "always leave them wanting more". Your goal in any pitch is not to sell yourself to your audience, but, if possible, make your audience clamor to know more about you (and, ideally, think that it was their idea). As I said, this is true for fundraising as well as a sales demo. When doing this, prepare two things in mind. I call these, "the stick" and "the hook".

Busy people are usually looking to quickly resolve something and then move on. Even worse, whether you are talking to a hiring manager, a purchasing manager, or a VC, these people often have very little penalties for rejecting good candidates, but strong penalties for accepting bad candidates. An HR manager at Ballard once told me that everyone remembered if he recommended an employee who was a dud, but no one would know about a good employee that he passed up, so his incentives (especially if he had a large stack of resumes to get through) were to find ways to reject people as quickly as possible, and bias his filter towards rejecting people. This shouldn't necessarily be this way, but it is rational behavior. Purchasing agents do it, investors do it. Heck, Google acknowleges that they do it too.

So, what is "the stick"? "The stick" is the one question that a lazy/busy investor will ask, hoping to discredit a company as fast as possible so he can move onto the next one. It isn't fair, but it is quick and easy, and common. I call it this because when I was with a tracking solar startup, many investors would see the moving lens assemblies (they moved because they tracked the sun) and say, "aha! What happens if a stick get jammed in there?". Never mind the fact that most rooves didn't have sticks or trees nearby, and if they did then the shade from the tree would surely cause a problem for non-tracking solar, or the fact that a twig hitting one panel wasn't going to bring down the business. It was easier to wave it off and say, "it'll never work, sticks will just get jammed in the thing". Other famous paraphrases of "stick" statements are "So people are going to pay money to sell their used socks online?" (eBay). Or, "People are going to pay $4 for a commodity that they can get anywhere for 50c?" (Starbucks). It may not seem fair, but try to think of the easiest, most narrowminded question to discredit your business. That's "the stick". Be sure you've got an answer to it.

The second thing is "the hook". It's now 6:19, and I can say that writing on an iPhone is pretty bad for this sort of thing, so I'll talk about "the hook" in another posting.

Oh look, the sun is up! Yay.

Radio Silence

noreply@blogger.com (Aaron Fyke) — Thu, 04 Mar 2010 22:07:00 +0000

I haven't posted in ages. Apologies for this. Part of the reason is that after I left the VC world, I entered the not-for-profit space as the head of the X PRIZE Foundation's Energy prize efforts. It was pretty exciting to be working on developing potentially a future X PRIZE. However, I couldn't talk much about what I was doing, as I was developing a future open competition.

I have since left the X PRIZE and founded my own company, and I can't talk much about that either! So, I haven't posted much.

However, I can say that I'm learning a lot about utilities and how electricity markets work. I just want to say - they are confusing. I spent a few years serving military customers, but I haven't seen this kind of skill in wielding acronyms:

The CAISO procures A/S such that the total procurement volumes plus self-provision volumes meet or exceed the WECC MORC and NERC CPS.

Ok...
From the Market Issues and Performance 2008 Annual Report

Spam bombs

noreply@blogger.com (Aaron Fyke) — Thu, 12 Nov 2009 19:24:00 +0000

Sigh...I had been doing so well. I guess a symptom of a non-obscure blog is one where the spam bots descend. I may have to turn off comments for a while.

World Energy Council

noreply@blogger.com (Aaron Fyke) — Sun, 30 Aug 2009 18:37:00 +0000

The World Energy Council is the most representative body of the energy industry with members in more than ninety countries. Its mission is to promote the sustainable supply and use of energy for the greatest benefit of all. Every three years, the WEC holds the World Energy Congress, a major global energy event attracting 4,000+ delegates. The next Congress will be in Montreal in September, 2010 (from their website).

I had the privilege of representing Canada at the 1995 WEC Congress (thanks Canadian Gas Association!) I've set up a LinkedIn page for members of that congress to reconnect. If anyone of my readers would like to join and have attended a WEC event - either find the LinkedIn group, or email me.